Correlation Between TrustBIX and NamSys

Can any of the company-specific risk be diversified away by investing in both TrustBIX and NamSys at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining TrustBIX and NamSys into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TrustBIX and NamSys Inc, you can compare the effects of market volatilities on TrustBIX and NamSys and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in TrustBIX with a short position of NamSys. Check out your portfolio center. Please also check ongoing floating volatility patterns of TrustBIX and NamSys.

Diversification Opportunities for TrustBIX and NamSys

0.59

Correlation Coefficient

TrustBIX  NamSys

Very weak diversification

The 3 months correlation between TrustBIX and NamSys is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding TrustBIX and NamSys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NamSys Inc and TrustBIX is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on TrustBIX are associated (or correlated) with NamSys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NamSys Inc has no effect on the direction of TrustBIX i.e., TrustBIX and NamSys go up and down completely randomly.

Pair Corralation between TrustBIX and NamSys

Assuming the 90 days horizon TrustBIX is expected to generate 6.22 times more return on investment than NamSys. However, TrustBIX is 6.22 times more volatile than NamSys Inc. It trades about 0.06 of its potential returns per unit of risk. NamSys Inc is currently generating about 0.06 per unit of risk. If you would invest  3.06  in TrustBIX on September 12, 2024 and sell it today you would earn a total of  0.89  from holding TrustBIX or generate 29.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	50.71%
Values	Daily Returns

TrustBIX  vs.  NamSys Inc

TrustBIX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TrustBIX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TrustBIX is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

NamSys Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NamSys Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NamSys reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TrustBIX and NamSys

The main advantage of trading using opposite TrustBIX and NamSys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TrustBIX position performs unexpectedly, NamSys can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in NamSys will offset losses from the drop in NamSys' long position.

The idea behind TrustBIX and NamSys Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.